Good to Great: Why Some Companies Make the Leap.and Others Don't
New York: HarperCollins Publishers, Inc.By Tom Hanson, Ph.D.
Newsweek in May surveyed a bunch of top CEOs on what their top 5 most influential books were.
The most often mentioned author was Jim Collins, who wrote Built to Last and Good to Great.
That darn book keeps popping up everywhere, doesn't it?
It's worthy of a full read, but here's enough to enable you to fake your way through a conversation about it.
The Research
Collins created super tough standards by which he determined which companies had gone from "good to great." Companies had to have been average for many years, then beat the general stock market by at least 7 times for the next 15 years. Of the thousands of companies the numbers were available on, only 11 met the standard. They studied the companies in depth, compiled mountains of numerical data and interview transcripts, and created a model to describe what was in the "black box" that fueled the transition to huge success.
The Model
The first noteworthy finding was that...
"There was no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembled relentlessly pushing a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of breakthrough, and beyond" (p. 14).
Collins and his research team categorized the key elements of the success process into three major areas:
- Disciplined People
- Disciplined Thought
- Disciplined Action
Each of the three has two sub-components.
1. Disciplined People
The first sub-component here is having a "Level 5 Leader." None of the companies had a rock star CEO, grabbing the reigns with great flair and pizzazz. Instead the leader had a seemingly paradoxical combo of humility and unwavering resolve to succeed. In other words, his focus was on the company's success instead of his own (humility), and he went after it like a dog with a bone (unwavering resolve). Does that sound like you? If you're more focused on your own success than on creating a company that will still be great after you're gone, you're off the good to great train before it leaves the station.
The second sub-component of disciplined people is "First who, then What." Instead of the leader setting the vision, then getting the "right people on the bus," the Super 11 companies got a bunch of really talented people on board, booted off the not-so-talented, and let the team of smarties choose the direction. Gems here include: "When in doubt, don't hire -- keep looking," and "When you know you need to make a people change, act."
2. Disciplined Thought
Here's what he means by "Disciplined Thought." First, "Confront the Brutal Facts." There needs to be a climate where truth is heard ("Facts are better than Dreams") and yet there must be absolute faith that regardless of the facts, the company will prevail. So, confront the brutal facts AND be unrelenting in your belief that you will succeed. That's disciplined thinking. Second, follow "The Hedgehog Concept." This one gets its name from an animal that does one thing well: protect itself by curling into a ball, exposing only spikey quills. It lives a simple life. And it doesn't try to do anything else. The good to great companies found one thing that met all three of these criteria: they were passionate about it, could be the best in the world at it, and could make gobs of money doing it. They found that one thing and that's all they did. They didn't venture off chasing shiny metal objects that crossed their bow. They did their one thing and did it great. That too is disciplined thinking.
3. Disciplined Action
First up here is a "Culture of Discipline." The trick here is in having systems that people actually follow, but at the same time allowing people to think and act like entrepreneurs. Also known as a balance between freedom and responsibility. This all makes #1 (above) make sense -- you need to hire disciplined people in the first place. This enabled the Super 11 companies to manage the systems instead of the people.
Finally, Disciplined Action included using "Technology Accelerators." In no case was new technology the source of the momentum for the company. In every case the companies used technology to accelerate their growth in the direction determined by #1 and #2. So they didn't see a new technology and fall in love with it and use it as their foundation. They first got the right people, then got the right direction, THEN found the technology that would help them get there.
So there you go. Those are the key elements of the great "Good to Great" book you keep seeing everywhere.
Get your company going from good to great by choosing any of the following:
- Focus on the greatness of your company, not yourself.
- Focus on getting great people on board, not people who just agree with you or make you look good.
- Pick a clear, simple focus for your company. Something the company can be great at, that the people love and that can make a pile-o-dough.
- Create systems your great people can follow and refine. Create an environment of execution.
- Find technology that serves you, don't let technology become your master.
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